Twitter, Inc.
TWITTER, INC. (Form: 8-K, Received: 07/28/2015 16:10:32)

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

July 28, 2015

 

Twitter, Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

001-36164

 

20-8913779

(State or other jurisdiction of
incorporation)

 

(Commission File Number)

 

(IRS Employer
Identification No.)

1355 Market Street, Suite 900

San Francisco, California 94103

(Address of principal executive offices, including zip code)

(415) 222-9670

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

 

 

 


 

Item 2.02 Results of Operations and Financial Condition.

On July 28, 2015, Twitter, Inc. (the “Company”) issued a press release announcing its financial results for the second quarter of 2015. In the press release, the Company also announced that it would be holding a conference call on July 28, 2015 to discuss its financial results for the second quarter of 2015. The full text of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

This information is intended to be furnished under Item 2.02 of Form 8-K, “Results of Operations and Financial Condition” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

Item 9.01 Financial Statements and Exhibits.

(d)

Exhibits.

 

Exhibit Number

  

Description

 

99.1

  

 

Press release issued by Twitter, Inc. dated July 28, 2015.

 

 

 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

TWITTER, INC.

 

By:

 

 

/s/ Vijaya Gadde

 

 

Vijaya Gadde

 

 

General Counsel & Secretary

Date: July 28, 2015

 

 

 

 


 

EXHIBIT INDEX

 

Exhibit Number

  

Description

 

99.1

  

 

Press release issued by Twitter, Inc. dated July 28, 2015.

 

 

Exhibit 99.1

 

July 28, 2015

 

Twitter Reports Second Quarter 2015 Results

 

SAN FRANCISCO, California - Twitter, Inc. (NYSE: TWTR) today announced financial results for the quarter ended June 30, 2015.

 

·

Q2 revenue of $502 million, up 61% year-over-year, and above the previously forecast range of $470 million to $485 million. Excluding the impact of year-over-year changes in foreign exchange rates, revenue would have increased 68%

·

Q2 GAAP net loss of $137 million and non-GAAP net income of $49 million

·

Q2 GAAP EPS of ($0.21) and non-GAAP diluted EPS of $0.07

·

Q2 adjusted EBITDA of $120 million, up 122% year-over-year, and above the previously forecast range of $97 million to $102 million, representing an adjusted EBITDA margin of 24%

 

“Our Q2 results show good progress in monetization, but we are not satisfied with our growth in audience,” said Jack Dorsey, interim CEO of Twitter.  “In order to realize Twitter’s full potential, we must improve in three key areas: ensure more disciplined execution, simplify our service to deliver Twitter's value faster, and better communicate that value.”

.

Second Quarter 2015 Financial Summary

(In thousands, except per share data)

 

 

Three Months Ended

 

 

Six Months Ended

 

 

June 30,

 

 

June 30,

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

GAAP Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

$

502,383

 

 

$

312,166

 

 

$

938,322

 

 

$

562,658

 

Net loss

$

(136,663

)

 

$

(144,642

)

 

$

(299,105

)

 

$

(277,004

)

Diluted net loss per share

$

(0.21

)

 

$

(0.24

)

 

$

(0.46

)

 

$

(0.47

)

Non-GAAP Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

$

120,188

 

 

$

54,131

 

 

$

224,241

 

 

$

91,080

 

Non-GAAP net income

$

48,518

 

 

$

14,596

 

 

$

95,026

 

 

$

14,779

 

Non-GAAP diluted net income per share

$

0.07

 

 

$

0.02

 

 

$

0.14

 

 

$

0.02

 

For additional information regarding the non-GAAP financial measures discussed in this release, please see “Non-GAAP Financial Measures” and “Reconciliation of GAAP to Non-GAAP Financial Measures” below.

Second Quarter 2015 Operational and Product Highlights

Monthly Active Users – Average Monthly Active Users (MAUs) were 316 million for the second quarter, up 15% year-over-year, and compared to 308 million in the previous quarter. The vast majority of MAUs added in the quarter on a sequential basis came from SMS Fast Followers. Excluding SMS Fast Followers, MAUs were 304 million for the second quarter, up 12% year-over-year, and compared to 302 million in the previous quarter. Mobile MAUs represented approximately 80% of total MAUs.

1


Consumer Products Twitter launched a new autoplay feature for native videos, Vines and GIFs, as well as Periscope live video streaming on Android .

Advertising Products –Twitter launched objective-based campaigns, reports and pricing to all advertisers globally in order to drive higher ROI.  Twitter also introduced installed application category targeting, a new feature that enables app advertisers to reach mobile users based on the categories of apps they have installed on their device. Twitter also rolled out Audience Insights, a tool that provides advertisers with aggregate information such as user demographics, interests, and purchasing behavior so they can better understand their key audiences.

Partnerships – Twitter announced a partnership with Google’s DoubleClick platform to improve advertising performance measurement and attribution for Twitter direct response marketers. As part of the partnership, Twitter will also make its inventory available through the DoubleClick Bid Manager platform. Twitter also launched its Official Partner Program, a new initiative combining industry-leading product and service partners that help businesses achieve better results on Twitter and beyond. 

Developers – Twitter’s mobile developer conference, Flock, continued its world tour with events in Asia Pacific and Latin America. In addition, Twitter announced a standalone Digits kit and introduced open sourcing for both Fabric and Digits kits on Android.

Acquired Companies   Twitter acquired TellApart, a leading marketing technology company providing retailers and e-commerce advertisers with unique cross-device retargeting capabilities through dynamic product ads and email marketing, and Whetlab, a startup focused on machine learning and artificial intelligence.

Second Quarter 2015 Financial Highlights

Revenue – Revenue for the second quarter of 2015 totaled $502 million, an increase of 61% compared to $312 million in the same period in 2014. Excluding the impact of year-over-year changes in foreign exchange rates, revenue would have increased 68%.

·

Advertising revenue totaled $452 million, an increase of 63% year-over-year. Excluding the impact of year-over-year changes in foreign exchange rates, advertising revenue would have increased 71%.

·

Mobile advertising revenue was 88% of total advertising revenue.

·

Data licensing and other revenue totaled $50 million, an increase of 44% year-over-year.

·

US revenue totaled $321 million, an increase of 53% year-over-year.  

·

International revenue totaled $181 million, an increase of 78% year-over-year.

Net loss – GAAP net loss was $137 million for the second quarter of 2015 compared to $145 million in the same period in 2014. GAAP net loss for the second quarter of 2015 included $ 175 million of stock-based compensation expense.

Adjusted EBITDA – Adjusted EBITDA was $120 million for the second quarter of 2015, an increase of 122% compared to $54 million in the same period in 2014.

Non-GAAP net income – Non-GAAP net income was $49 million for the second quarter of 2015 compared to $15 million in the same period in 2014.

EPS – Basic and diluted GAAP EPS was ($0.21) for the second quarter of 2015 compared to ($0.24) in the same period in 2014.

Non-GAAP diluted EPS – Non-GAAP diluted EPS was $0.07 for the second quarter of 2015 compared to $0.02 in the same period in 2014.

Capital expenditures – Purchases of property and equipment for the second quarter of 2015 were $93 million. Additionally, $6 million of equipment purchases were financed through capital leases during the second quarter of 2015.

2


Cash, cash equivalents and marketable securities – As of June 30 , 2015, cash, cash equivalents, and marketable securities were approximately $3.6 billion, compared to $3.6 billion as of March 31, 201 5 .

Outlook

Twitter’s outlook for the third quarter of 2015 is as follows:

·

Revenue is projected to be in the range of $545 million to $560 million.

·

Adjusted EBITDA is projected to be in the range of $110 million to $115 million.

·

Stock-based compensation expense is projected to be in the range of $190 million to $200 million, excluding the impact of equity awards that may be granted in connection with potential future acquisitions.

Twitter’s outlook for the full year of 2015 is as follows:

·

Revenue is projected to be in the range of $2.20 billion to $2.27 billion.

·

Adjusted EBITDA is projected to be in the range of $520 million to $540 million.

·

Capital expenditures are projected to be in the range of $450 million to $550 million.

·

Stock-based compensation expense is projected to be in the range of $750 million to $790 million, excluding the impact of equity awards that may be granted in connection with potential future acquisitions.

Note that Twitter’s outlook for the third quarter and full year of 2015 reflects foreign exchange rates as of July 15, 2015.

Webcast and Conference Call Details

Twitter will host a conference call today, Tuesday, July 28, 2015, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to discuss financial results. Questions submitted via Twitter, directed to @TwitterIR, using the hashtag #TWTRearnings will be considered during the Q&A portion of the conference call in addition to questions submitted by conference call participants. A live webcast of the conference call, Twitter’s financial results and supplemental slides will be accessible from the Investor Relations page of Twitter’s website at investor.twitterinc.com. A replay will be archived and accessible at the same website after the conference call. Twitter has used, and intends to continue to use, its Investor Relations website (investor.twitterinc.com), as well as certain Twitter accounts (@jack, @twitter and @twitterIR), as means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

About Twitter, Inc.

Twitter (NYSE: TWTR) is a global platform for public self-expression and conversation in real time. By developing a fundamentally new way for people to consume, create, distribute and discover content, Twitter enables any voice to echo around the world instantly and unfiltered. The service can be accessed at Twitter.com, on a variety of mobile devices, and via SMS. Available in more than 35 languages, Twitter has 316 million monthly active users. For more information, visit about.twitter.com or follow @twitter.

3


Forward Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements generally relate to future events or Twitter's future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these words or other similar terms or expressions that concern Twitter's expectations, strategy, plans or intentions. Forward-looking statements in this press release include, but are not limited to, Twitter's strategies and business plans, Twitter's expectations regarding its revenue, adjusted EBITDA, capital expenditures and stock-based compensation expense for the third quarter and full year 2015. Twitter's expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include the possibility that: Twitter's user base and engagement do not continue to grow; Twitter's new products and product features do not meet expectations; advertisers reduce or discontinue their spending on Twitter; data partners reduce or discontinue their purchases of data licenses from Twitter; and Twitter experiences expenses that exceed its expectations. The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in Twitter's Annual Report on Form 10-K for the fiscal year ended December 31, 2014 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 filed with the Securities and Exchange Commission. Additional information will also be set forth in Twitter's Quarterly Report on Form 10-Q for the quarter ended June 30, 2015. The forward-looking statements in this press release are based on information available to Twitter as of the date hereof, and Twitter disclaims any obligation to update any forward-looking statements, except as required by law.

Non-GAAP Financial Measures

To supplement Twitter's financial information presented in accordance with generally accepted accounting principles in the United States, or GAAP, Twitter considers certain financial measures that are not prepared in accordance with GAAP, including revenue excluding foreign exchange effect, advertising revenue excluding foreign exchange effect, adjusted EBITDA, non-GAAP net income (loss), adjusted EBITDA margin and non-GAAP diluted EPS. Twitter defines adjusted EBITDA as net loss adjusted to exclude stock-based compensation expense, depreciation and amortization expense, interest and other expenses, net and provision (benefit) for income taxes; and Twitter defines non-GAAP net income (loss) as net loss adjusted to exclude stock-based compensation expense, amortization of acquired intangible assets, non-cash interest expense related to convertible notes, non-cash expense related to acquisitions and the income tax effects related to acquisitions. Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by revenue.

Twitter uses the non-GAAP financial measures of adjusted EBITDA, non-GAAP net income (loss), adjusted EBITDA margin and non-GAAP diluted EPS in evaluating its operating results and for financial and operational decision-making purposes. Twitter believes that adjusted EBITDA, non-GAAP net income (loss), adjusted EBITDA margin and non-GAAP diluted EPS help identify underlying trends in its business that could otherwise be masked by the effect of the expenses that we exclude in adjusted EBITDA, non-GAAP net income (loss), adjusted EBITDA margin and non-GAAP diluted EPS. Twitter also believes that adjusted EBITDA, non-GAAP net income (loss), adjusted EBITDA margin and non-GAAP diluted EPS provide useful information about its operating results, enhance the overall understanding of Twitter's past performance and future prospects and allow for greater transparency with respect to key metrics used by Twitter's management in its financial and operational decision-making. Twitter uses these measures to establish budgets and operational goals for managing its business and evaluating its performance. Twitter translated revenue and advertising revenue for the quarter and six months ended June 30, 2015 using the prior year's monthly exchange rates for its settlement currencies other than the U.S. dollar, which Twitter believes is a useful metric that facilitates comparison to its historical performance. Twitter is presenting these non-GAAP financial measures to assist investors in seeing Twitter's operating results through the eyes of management, and because it believes that these measures provide an additional tool for investors to use in comparing Twitter's core business operating results over multiple periods with other companies in its industry.


4


These non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. These non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similarly-titled measures presented by other companies .  

For future periods, Twitter is unable to provide a reconciliation of adjusted EBITDA to net loss as a result of the uncertainty regarding, and the potential variability of, depreciation and amortization expense, interest and other expenses, net and provision (benefit) for income taxes, that are expected to be incurred in the future.

 

Contacts

Investors:  
Dave Rivinus

ir@twitter.com

Press: 
Jim Prosser

jprosser@twitter.com

 

 

 

5


 

TWITTER, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

 

June 30,

 

 

December 31,

 

 

2015

 

 

2014

 

Assets

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

$

883,307

 

 

$

1,510,724

 

Short-term investments

 

2,677,263

 

 

 

2,111,154

 

Accounts receivable, net

 

475,204

 

 

 

418,454

 

Prepaid expenses and other current assets

 

234,653

 

 

 

215,521

 

Total current assets

 

4,270,427

 

 

 

4,255,853

 

Property and equipment, net

 

651,017

 

 

 

557,019

 

Intangible assets

 

156,352

 

 

 

105,011

 

Goodwill

 

1,102,193

 

 

 

622,570

 

Other assets

 

50,345

 

 

 

42,629

 

Total assets

$

6,230,334

 

 

$

5,583,082

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

$

51,614

 

 

$

53,241

 

Accrued and other current liabilities

 

274,621

 

 

 

228,233

 

Capital leases, short-term

 

98,606

 

 

 

112,320

 

Total current liabilities

 

424,841

 

 

 

393,794

 

Convertible notes

 

1,414,896

 

 

 

1,376,020

 

Capital leases, long-term

 

83,381

 

 

 

118,950

 

Deferred and other long-term tax liabilities, net

 

31,768

 

 

 

24,706

 

Other long-term liabilities

 

44,264

 

 

 

43,209

 

Total liabilities

 

1,999,150

 

 

 

1,956,679

 

Stockholders’ equity:

 

 

 

 

 

 

 

Common stock

 

3

 

 

 

3

 

Additional paid-in capital

 

6,135,566

 

 

 

5,208,870

 

Accumulated other comprehensive loss

 

(32,834

)

 

 

(10,024

)

Accumulated deficit

 

(1,871,551

)

 

 

(1,572,446

)

Total stockholders’ equity

 

4,231,184

 

 

 

3,626,403

 

Total liabilities and stockholders’ equity

$

6,230,334

 

 

$

5,583,082

 

 

 

 

 

 

 

 

 

 

 

6


TWITTER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

 

 

Three Months Ended

 

 

Six Months Ended

 

 

June 30,

 

 

June 30,

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

Revenue

$

502,383

 

 

$

312,166

 

 

$

938,322

 

 

$

562,658

 

Costs and expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

167,623

 

 

 

100,027

 

 

 

311,098

 

 

 

185,530

 

Research and development

 

198,907

 

 

 

177,095

 

 

 

388,653

 

 

 

326,486

 

Sales and marketing

 

201,948

 

 

 

140,261

 

 

 

385,505

 

 

 

246,496

 

General and administrative

 

64,909

 

 

 

44,694

 

 

 

130,686

 

 

 

83,428

 

Total costs and expenses

 

633,387

 

 

 

462,077

 

 

 

1,215,942

 

 

 

841,940

 

Loss from operations

 

(131,004

)

 

 

(149,911

)

 

 

(277,620

)

 

 

(279,282

)

Interest expense

 

(24,437

)

 

 

(2,654

)

 

 

(48,756

)

 

 

(5,756

)

Other income (expense), net

 

(695

)

 

 

2,324

 

 

 

8,430

 

 

 

3,657

 

Loss before income taxes

 

(156,136

)

 

 

(150,241

)

 

 

(317,946

)

 

 

(281,381

)

Benefit from income taxes

 

(19,473

)

 

 

(5,599

)

 

 

(18,841

)

 

 

(4,377

)

Net loss

$

(136,663

)

 

$

(144,642

)

 

$

(299,105

)

 

$

(277,004

)

Net loss per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

$

(0.21

)

 

$

(0.24

)

 

$

(0.46

)

 

$

(0.47

)

Weighted-average shares used to

   compute net loss per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

655,721

 

 

 

595,607

 

 

 

648,143

 

 

 

587,760

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7


TWITTER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

Three Months Ended

 

 

Six Months Ended

 

 

June 30,

 

 

June 30,

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(136,663

)

 

$

(144,642

)

 

$

(299,105

)

 

$

(277,004

)

Adjustments to reconcile net loss to net cash provided by

   operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

76,049

 

 

 

45,631

 

 

 

143,913

 

 

 

85,582

 

Stock-based compensation expense

 

175,143

 

 

 

158,411

 

 

 

357,948

 

 

 

284,780

 

Amortization of discount on convertible notes

 

17,006

 

 

 

 

 

 

33,644

 

 

 

 

Provision for bad debt

 

553

 

 

 

658

 

 

 

3,345

 

 

 

1,436

 

Deferred income tax benefit

 

(22,364

)

 

 

(7,747

)

 

 

(24,306

)

 

 

(7,737

)

Other non-cash adjustments

 

1,214

 

 

 

(1,589

)

 

 

(5,197

)

 

 

666

 

Changes in assets and liabilities, net of assets acquired

   and liabilities assumed from acquisitions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

(39,785

)

 

 

(46,074

)

 

 

(43,944

)

 

 

(37,213

)

Prepaid expenses and other assets

 

(5,221

)

 

 

13,186

 

 

 

(7,861

)

 

 

(17,229

)

Accounts payable

 

(9,723

)

 

 

1,710

 

 

 

(11,437

)

 

 

1,407

 

Accrued and other liabilities

 

33,770

 

 

 

62,153

 

 

 

35,160

 

 

 

89,692

 

Net cash provided by operating activities

 

89,979

 

 

 

81,697

 

 

 

182,160

 

 

 

124,380

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

(92,605

)

 

 

(44,457

)

 

 

(160,340

)

 

 

(94,077

)

Purchases of marketable securities

 

(1,505,704

)

 

 

(568,264

)

 

 

(2,235,497

)

 

 

(1,039,014

)

Proceeds from maturities of marketable securities

 

629,732

 

 

 

532,593

 

 

 

1,342,137

 

 

 

1,009,926

 

Proceeds from sales of marketable securities

 

156,630

 

 

 

 

 

 

335,261

 

 

 

168,138

 

Changes in restricted cash

 

(435

)

 

 

422

 

 

 

(3,797

)

 

 

(11,716

)

Business combinations, net of cash acquired

 

2,627

 

 

 

(132,496

)

 

 

(26,300

)

 

 

(132,496

)

Purchases of cost method investments and others

 

(5,000

)

 

 

(400

)

 

 

(7,000

)

 

 

(400

)

Net cash provided by investing activities

 

(814,755

)

 

 

(212,602

)

 

 

(755,536

)

 

 

(99,639

)

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxes paid related to net share settlement of equity awards

 

(306

)

 

 

(1,028

)

 

 

(6,480

)

 

 

(16,168

)

Repayments of capital lease obligations

 

(29,388

)

 

 

(21,365

)

 

 

(62,934

)

 

 

(42,886

)

Proceeds from exercise of stock options

 

3,213

 

 

 

14,557

 

 

 

6,962

 

 

 

15,907

 

Proceeds from issuances of common stock under

   employee stock purchase plan

 

21,600

 

 

 

21,224

 

 

 

21,600

 

 

 

21,224

 

Other financing activities

 

 

 

 

 

 

 

 

 

 

(1,162

)

Net cash provided by (used in) financing activities

 

(4,881

)

 

 

13,388

 

 

 

(40,852

)

 

 

(23,085

)

Net increase (decrease) in cash and cash equivalents

 

(729,657

)

 

 

(117,517

)

 

 

(614,228

)

 

 

1,656

 

Foreign exchange effect on cash and cash equivalents

 

5,559

 

 

 

1,738

 

 

 

(13,189

)

 

 

2,310

 

Cash and cash equivalents at beginning of period

 

1,607,405

 

 

 

960,755

 

 

 

1,510,724

 

 

 

841,010

 

Cash and cash equivalents at end of period

$

883,307

 

 

$

844,976

 

 

$

883,307

 

 

$

844,976

 

Supplemental disclosures of non-cash investing and financing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued in connection with acquisitions

$

458,859

 

 

$

51,846

 

 

$

516,538

 

 

$

51,846

 

Equipment purchases under capital leases

$

5,723

 

 

$

30,782

 

 

$

10,544

 

 

$

47,739

 

Changes in accrued equipment purchases

$

(3,273

)

 

$

32,546

 

 

$

9,087

 

 

$

43,597

 

 

8


TWITTER, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(In thousands, except per share data)

(Unaudited)

 

Three Months Ended

 

 

Six Months Ended

 

 

June 30,

 

 

June 30,

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

Non-GAAP net income and net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(136,663

)

 

$

(144,642

)

 

$

(299,105

)

 

$

(277,004

)

Stock-based compensation expense

 

175,143

 

 

 

158,411

 

 

 

357,948

 

 

 

284,780

 

Amortization of acquired intangible assets

 

13,965

 

 

 

8,099

 

 

 

24,760

 

 

 

14,275

 

Non-cash interest expense related to convertible notes

 

17,006

 

 

 

 

 

 

33,644

 

 

 

 

Non-cash expense related to acquisitions

 

926

 

 

 

 

 

 

926

 

 

 

 

Income tax effects related to acquisitions

 

(21,859

)

 

 

(7,272

)

 

 

(23,147

)

 

 

(7,272

)

Non-GAAP net income

$

48,518

 

 

$

14,596

 

 

$

95,026

 

 

$

14,779

 

GAAP diluted shares

 

655,721

 

 

 

595,607

 

 

 

648,143

 

 

 

587,760

 

Dilutive equity awards (1)

 

40,147

 

 

 

78,936

 

 

 

43,636

 

 

 

95,362

 

Non-GAAP diluted shares

 

695,868

 

 

 

674,543

 

 

 

691,779

 

 

 

683,122

 

Non-GAAP diluted net income per share

$

0.07

 

 

$

0.02

 

 

$

0.14

 

 

$

0.02

 

Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(136,663

)

 

$

(144,642

)

 

$

(299,105

)

 

$

(277,004

)

Stock-based compensation expense

 

175,143

 

 

 

158,411

 

 

 

357,948

 

 

 

284,780

 

Depreciation and amortization expense

 

76,049

 

 

 

45,631

 

 

 

143,913

 

 

 

85,582

 

Interest and other expense, net

 

25,132

 

 

 

330

 

 

 

40,326

 

 

 

2,099

 

Benefit from income taxes

 

(19,473

)

 

 

(5,599

)

 

 

(18,841

)

 

 

(4,377

)

Adjusted EBITDA

$

120,188

 

 

$

54,131

 

 

$

224,241

 

 

$

91,080

 

Stock-based compensation expense by function:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

$

10,486

 

 

$

13,869

 

 

$

23,372

 

 

$

23,700

 

Research and development

 

103,121

 

 

 

92,493

 

 

 

206,157

 

 

 

170,811

 

Sales and marketing

 

39,607

 

 

 

37,547

 

 

 

82,265

 

 

 

65,348

 

General and administrative

 

21,929

 

 

 

14,502

 

 

 

46,154

 

 

 

24,921

 

Total stock-based compensation expense

$

175,143

 

 

$

158,411

 

 

$

357,948

 

 

$

284,780

 

Amortization of acquired intangible assets by function:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

$

10,345

 

 

$

5,754

 

 

$

18,546

 

 

$

9,894

 

Research and development

 

64

 

 

 

140

 

 

 

128

 

 

 

280

 

Sales and marketing

 

3,556

 

 

 

2,205

 

 

 

6,086

 

 

 

4,101

 

General and administrative

 

 

 

 

 

 

 

 

 

 

 

Total amortization of acquired intangible assets

$

13,965

 

 

$

8,099

 

 

$

24,760

 

 

$

14,275

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Gives effect to potential common stock instruments such as stock options, RSUs, unvested restricted stock and warrant. There is no dilutive effect of the notes nor the related hedge and warrant transactions.

 

 

9


TWITTER, INC.

 

RECONCILIATION OF GAAP REVENUE TO NON-GAAP CONSTANT CURRENCY REVENUE

 

(In millions)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

June 30,

 

 

June 30,

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

Revenue and advertising revenue excluding foreign exchange effect:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

$

502

 

 

$

312

 

 

$

938

 

 

$

563

 

Foreign exchange effect on 2015 revenue using 2014 rates

 

23

 

 

 

 

 

 

 

38

 

 

 

 

 

Revenue excluding foreign exchange effect

$

525

 

 

 

 

 

 

$

976

 

 

 

 

 

Revenue year-over-year change percent

 

61

%

 

 

 

 

 

 

67

%

 

 

 

 

Revenue excluding foreign exchange effect year-over-year change percent

 

68

%

 

 

 

 

 

 

74

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advertising revenue

$

452

 

 

$

277

 

 

$

840

 

 

$

503

 

Foreign exchange effect on 2015 advertising revenue using 2014 rates

 

23

 

 

 

 

 

 

 

38

 

 

 

 

 

Advertising revenue excluding foreign exchange effect

$

475

 

 

 

 

 

 

$

878

 

 

 

 

 

Advertising revenue year-over-year change percent

 

63

%

 

 

 

 

 

 

67

%

 

 

 

 

Advertising revenue excluding foreign exchange effect year-over-year change percent

 

71

%

 

 

 

 

 

 

75

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10